Chapter 3: Market Demand and Supply

LEARNING OBJECTIVES
The steps to achieve the learning objectives include reading sections from your textbook and the
causation chain game, which is available directly on the Tucker web site. The steps also include
references to Ask the Instructor Video Clips, the Graphing Workshop available through
CourseMate on the Tucker website.
#1 - Understand that a change in quantity demanded is a movement along a demand curve, and a
change in demand is a shift in the demand curve.
Step 1

Read the sections in your textbook titled Law of Demand, The Distinction Between
Changes in Quantity Demanded and Change in Demand and Nonprice Determinants
of Demand.

Step 2

Watch the Graphing Workshop See It! tutorial titled Demand, Shifts in Demand.
Study the factors that shift the demand for milk.

Step 3

Read the Graphing Workshop Grasp It! exercise titled Demand. This exercise uses a
slider bar to demonstrate the concept of demand using the daily demand for hamburgers
in a medium-sized city.

Step 4

Create a new graph at the Graphing Workshop Try It! exercise titled Demand. This
exercise illustrates the impact of a change in income on the demand for CDs.

Step 5

Play the Causation Chains Game titled Movement Along a Demand Curve Versus a
Shift in Demand.

Step 6

Listen to the Ask the Instructor Video Clip titled What Factors Affect the Auction
Price of Your House? Notice the nonprice determinants of demand that affect the price
of a house at an auction.

Step 7

Listen to the Ask the Instructor Video Clip titled How Would You Like to be in the
Inferior Goods Business? You will learn the economists definition of inferior goods
versus the everyday use of this term.

The Result

By following the steps above, you have learned that demand describes buyer behavior
and a change in the price for a good or service causes a movement along a demand curve.
You have also learned that changes in nonprice factors shift the demand curve leftward or
rightward.

#2 - Understand that a change in quantity supplied is a movement along a supply curve, and a
change in supply is a shift in the supply curve.
Step 1

Read the sections in your textbook titled Law of Supply, The Distinction Between
Changes in Quantity Supplied and Change in Supply and Nonprice Determinants of
Supply.

Step 2

Watch the Graphing Workshop See It! tutorial titled Supply, Shifts in Supply. Study
the factors that shift the supply for milk.

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Step 3

Read the Graphing Workshop Grasp It! exercise titled Supply. This exercise uses a
slider bar to demonstrate the concept of supply using the daily supply of hamburgers in a
medium-sized city.

Step 4

Create a new graph at the Graphing Workshop Try It! exercise titled Supply. This
exercise illustrates the impact of a change in income on the supply of personal computers.

Step 5

Play the Causation Chains Game titled Movement Along a Supply Curve Versus a
Shift in Supply.

The Result

By following the steps above, you have learned that supply describes seller behavior and
a change in the price for a good or service causes a movement along the supply curve.
You have also learned changes in nonprice factors shift the supply curve leftward or
rightward.

#3 - Understand that equilibrium exists at the price and quantity where the quantity demanded
equals the quantity supplied.
Step 1

Read the section in your textbook titled A Market Supply and Demand Analysis.

Step 2

Watch the Graphing Workshop See It! tutorial titled Market Equilibrium. Study how
market equilibrium is established for milk.

Step 3

Read the Graphing Workshop Grasp It! exercise titled Market Equilibrium. This
exercise uses a slider bar to demonstrate the concept of market equilibrium for
hamburgers.

Step 4

Create a new graph at the Graphing Workshop Try It! exercise titled Market
Equilibrium. This exercise illustrates how the intersection of the demand and supply
curves establishes market equilibrium.

Step 5

Play the Causation Chains Game titled Equilibrium and the Price System.

The Result

By following the steps above, you have learned that the initial equilibrium occurs at the
point where the demand curve crosses the supply curve. You also have learned that either
a market surplus or shortage provides the mechanism that establishes the equilibrium
price and equilibrium quantity.

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